The European Green Deal plan, published yesterday, included these comments:

The private sector will be key to financing the green transition. Long-term signals are needed to direct financial and capital flows to green investment and to avoid stranded assets. The Commission will present a renewed sustainable finance strategy in the third quarter of 2020 that will focus on a number of actions.

First, the strategy will strengthen the foundations for sustainable investment. This will require notably that the European Parliament and Council adopt the taxonomy for classifying environmentally sustainable activities. Sustainability should be further embedded into the corporate governance framework, as many companies still focus too much on short-term financial performance compared to their long-term development and sustainability aspects. At the same time, companies and financial institutions will need to increase their disclosure on climate and environmental data so that investors are fully informed about the sustainability of their investments. To this end, the Commission will review the Non-Financial Reporting Directive. To ensure appropriate management of environmental risks and mitigation opportunities, and reduce related transaction costs, the Commission will also support businesses and other stakeholders in developing standardised natural capital accounting practices within the EU and internationally.

Second, increased opportunities will be provided for investors and companies by making it easier for them to identify sustainable investments and ensuring that they are credible. This could be done via clear labels for retail investment products and by developing an EU green bond standard that facilitates sustainable investment in the most convenient way.

Third, climate and environmental risks will be managed and integrated into the financial system. This means better integrating such risks into the EU prudential framework and assessing the suitability of the existing capital requirements for green assets. We will also examine how our financial system can help to increase resilience to climate and environmental risks, in particular when it comes to the physical risks and damage arising from natural catastrophes.

I added the emphasis to highlight those areas I find of most interest.

As I have mentioned once or twice, I am now working on sustainable cost accounting. These comments from the Commission have clear implications for that work.

First,  sustainable cost accounting challenges the notion that climate data is non-financial reporting. The idea that climate s outside the corporate framework and so can be reported separately is wrong. It is not separate, or other, or an externality. And business is not immune from the impact financially.  Sustainable cost accounting seeks to bring climate reporting into the core of financial reporting. I believe that this is essential.

Second, this means that the third noted objective is the real priority here. I know the focus is on macro issues in this paragraph but if the sentiment is true for government and macro reporting so too is it for micro and corporate reporting.

It is apparent that there is much work to do in this area, and the thinking on it is a long way from being complete as yet. The Corporate Accountability Network has much to do.